Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/69556
Authors: 
Konrad, Kai A.
Cusack, Thomas R.
Year of Publication: 
2013
Series/Report no.: 
CESifo Working Paper: Public Choice 4071
Abstract: 
What is the strategic role of membership in an intergovernmental group with unanimity requirements if the group negotiates with an external player in a setting with incomplete information? Being in such a group has a strategic effect compared to negotiating as a stand-alone player and reduces the demands of the outside player: being in a group lends additional bargaining power. Negotiating as a group may also cause more inefficiencies due to bargaining failure, and this may harm also the intergovernmental group. We uncover the role of preference alignment and preference independence between members of the coalition group for equilibrium payoffs and welfare effects. In this analysis we also distinguishing between coalition groups with and without side payments. Overall, coalition groups tend to perform well for the members of the coalition group in comparison to fully decentralized negotiations, particularly if the objectives of the members of the coalition group are not always perfectly aligned.
Subjects: 
bargaining
incomplete information
coalitions
groups
strategic bargaining power
JEL: 
F51
F53
F59
Document Type: 
Working Paper

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